Regardless of your company size, all employers are subject to the Employee Retirement Income Security Act  (ERISA).  Penalties are tens of thousands of dollars and will cripple a business should you fail an audit.


At any given time, your organization may be selected for a U.S. Department of Labor (DOL) civil investigation (commonly known as an audit) to ensure that your employee benefit plans are in compliance. The Employee Retirement Income Security Act of 1974 (ERISA) establishes standards governing the operation of employee benefit plans and grants the DOL investigative authority. Depending on the complexity of your plan design, availability of documents, degree of cooperation between the DOL and your plan administrators, and the number of potential violations, an audit can take anywhere from several weeks to over a year. The following steps traditionally occur during this extensive process:
1) Plan receives an initial document request via a letter from the regional or district office of the Employee Benefits Security Administration (EBSA), a division of the DOL.
• The letter advises that an investigation is underway and requests documents to be provided by a specific time.
• Often, EBSA inquiries are sent first to the plan service providers (third-party administrators, insurers, banks, trust companies, etc.) prior to contacting the plan sponsor. Therefore, you should establish a solid relationship with your service provider to ensure that they contact you in the event of an audit request.
• Document requests can vary from only a few pages needed to volumes of documents, depending on the nature of the audit. EBSA may seek one or more of the following types of documents:
– Insurance policies and riders, HCR/PPACA and ERISA Annual notices
– Service provider agreements – Summary plan descriptions
– Summaries of material modifications
– Form 5500s for the last two or three plan years
– Plan financial statements
– Trustee and corporate minutes
– Summary annual reports
– Participant records
– Bonds

– HCR/PPACA and Annual ERISA Disclosure Notices
• After receiving an initial request, you should promptly respond. It is in your best interest to contact the EBSA investigator and inquire about the purpose, scope and timing of the investigation while establishing a nice rapport. You may want to request an extension. The DOL may grant an additional two to three weeks; this will give you more time to gather documents and consult
an attorney.
• Select a representative from your company to serve as the contact person for the investigation. He/she will handle all communications, document requests and meetings with the EBSA investigator.
• Make a copy of all requested documents, rather than allowing direct access to the originals.
• Contact legal counsel for assistance with assessing the validity of any claims, reviewing

At any given time, your organization may be selected for a U.S. Department of Labor civil investigation (audit) to ensure that your employee benefit plans are in compliance. This document outlines the steps that traditionally occur during the audit process.

documents before they are given to the investigator and sorting out any other legal issues. You may want to conduct an internal audit at this time to remedy any problems prior to the onsite investigation.
• Notify senior management that an investigation is underway and the potential ramifications.
2) EBSA conducts an onsite investigation.
• After receiving the initially requested documents, the EBSA investigator may also want to review more documents at your location. This may include, but is not limited to, employee booklets and forms, plan enrollment records, payroll records, evidence of electronic fund transfers, insurance company financial experience reports and investment records.
3) EBSA investigator will interview multiple individuals to validate facts.
4) EBSA identifies potential ERISA violations.
• If the EBSA investigator identifies potential ERISA violations, the regional office will issue a Voluntary Compliance (VC) Notice Letter outlining the violations and allowing the plan sponsor a chance to rectify the problem. Typically, the investigator will first present these problems to you orally and will then submit the letter.
• It is your obligation to investigate the validity of DOL’s findings and determine if you agree with them. If you do not agree with these findings and will not take action to rectify the situation, you run the risk of a lawsuit from the DOL.
• If you agree with the violations highlighted in the VC Notice Letter, take action immediately to fix the problem. If you fix a
fiduciary breach before the issuance of a VC Notice Letter, you may save yourself from a 20 percent penalty required under ERISA.
• If the violations concern the civil provisions of ERISA, EBSA will take action to correct all violations and restore plan losses. This may include paying back to the plan or participants to cover losses, paying penalty amounts and giving up profits.
• If no violations are found by the EBSA investigator, EBSA will issue a closing letter explaining that it has finished the investigation, without further action.
5) EBSA creates a settlement agreement.
• You and the EBSA may create a settlement agreement after negotiating how you will voluntarily make corrections to rectify violations. The following actions may be detailed in this agreement: amount of funds to be credited, timing of each step to rectify problem, corrective actions and communications about the investigation.
6) EBSA issues a closing letter following voluntary compliance.
• After the VC Notice letter is issued and all problems have been rectified, the EBSA will send a closing letter explaining that compliance has been achieved.
DOL Audit Suggestions:
Though this may appear to be a trying process, it does not need to be. Consider these best practices.
• Treat the investigator with the utmost respect and the investigation as a major priority.
• Consult with your legal counsel as soon as a document request arrives.
• Keep senior management apprised of the progress on the investigation.
• Obtain as much information about the investigation as possible from the EBSA investigator.
• Arrange a time to deliver documentation to the investigator that allows you enough time to gather all the requested documents, while also accommodating his or her schedule.
• Consult with your retirement service providers when receiving a document request to ensure they will be involved in rectifying any noncompliance issues.
• Gather materials for an onsite investigation in an orderly fashion and have them ready for the investigator when he or she arrives.
• Have your legal counsel work with interviewees to familiarize them with the scope and purpose of the investigation.
• If your investigation yields a violation, learn as much about the violation as possible before the VC letter arrives. Discuss these violations with your legal counsel.
• If you determine that you will make changes to the alleged violations, have your legal counsel work with the DOL to ensure that there is an understanding of exactly what needs to be changed.
• Generally it is advisable to cooperate with the DOL and resolve the matter as favorably and quickly as possible. You will save in both internal time spent on the matter as well as legal fees.

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The Daily Record announces its 2013 Leading Women  honorees

5:59  am Fri, September 27, 2013

Posted: 5:59 am Fri, September 27, 2013   By Daily Record Staff

The Daily Record is proud to announce its Leading Women honorees for  2013.

Leading  Women identifies women age 40 or younger for the tremendous accomplishments  they have made so far in their career. They were judged on professional  experience, community involvement and a commitment to inspiring change.

This year’s honorees will be honored at a dinner Thursday, Dec. 5 at the  Hyatt Regency Inner Harbor in Baltimore.  Click  here to purchase tickets to the event.

The honorees are:

Jacqueline Allen, Saul Ewing LLP

LaKeecia Allen, Office of the County Attorney for  Prince George’s County

Tara Barnes, Rollins, Smalkin, Richards & Mackie,  LLC

Vicki Brick, Brick Bodies

Luisa Caiazzo, SARC, Inc.

Amina Chaudhry, Chase Brexton Health Services

Lillian Cruz,  U.S. House of Representatives

Katrina Dennis,  Kramon & Graham, P.A.

Dr. Alison Dunton, The Family Center

Natali Fani-Gonzalez, Matea Group

Antonia Fasanelli, Homeless Persons Representation  Project

Amy Burke Friedman, Profiles, Inc.

MacKenzie Garvin, Esq. Office of the Mayor

Lydia Hu, Tydings & Rosenberg

Cynthia James, Community Bridges, Inc.

Mothyna James-Brightful, TurnAround, Inc.

Angela Johns, Northrop Grumman Corporation

Sarah Kaiser, Family Crisis Resource Center, Inc.

Dr. Rita Kalyani, Johns Hopkins University School of  Medicine

Alice Kennedy, City of Baltimore

Amy Kleine, The Harry and Jeanette Weinberg Foundation

Molly Knipe, YWCA of Annapolis & Anne Arundel County

Angie Lienert, IntelliGenesis LLC

Shelly Martin, Office of the Attorney General

Melissa Martinez, McGuireWoods LLP

Martha McKenna, McKenna Pihlaja

Robin McKinney, Maryland CASH Campaign

Cristina Meneses, Network for Public Health Law

Annastasiah Mhaka, Ph.D., Johns Hopkins Medicine

Erin Millar, Whiteford Taylor & Preston LLP

Marilyn Mosby, Liberty Mutual Insurance

Aaliyah Muhammad, State’s Attorney’s Office for Baltimore  City

Molly Alton Mullins, Chesapeake Bay Trust

Kimberly Neal, Niles, Barton & Wilmer, LLP

Evynn Overton, Beveridge & Diamond, P.C.

Sara Paranilam, Baltimore City, Department of Planning

Veronica Perrigan, A. James Clark School of Engineering,  University of Maryland, College Park

Karyn Riley, Visit Baltimore

Sharayna Christmas Rose, Muse 360 Arts

Meggan Saulo, Legg Mason

Dana Schwartz, Business Volunteers Maryland

Carrie Shapiro, Innovative Insurance Solutions, LLC

Meg Sheetz, Medifast, Inc.

Amber Shrodes, Harford County Public Library

Nicole Egerton Taylor, Law Offices of Taylor & Taylor,  LLC

Sherita Thomas, T. Rowe Price

Jessica Trzyna, Weiss PR

Jessica Weber, Brown, Goldstein & Levy, LLP

Jennifer Weiss Wilkerson, MedStar Health

Michelle Wilson, State’s Attorney’s Office for Baltimore  City



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